Novartis ruling opens doors for Indian pharma firms

The Supreme Court’s rejection of Swiss drugmaker Novartis’ patent application for its blockbuster anti-cancer drug Glivec is poised to give a boost to domestic generic drug manufacturers by providing clarity on the extent of innovation required to retain patents in India.

The decision means Indian generic drugmakers can continue to sell copies of the drug at a lower price in India — and that is a blow for some multinationals banking on easy patent power.

Novartis shares plunged 6.8% to Rs.558 on the Bombay Stock Exchange, a 14-month low after the judgment, before recovering losses to end down 1.8% to Rs.588.

Glivec, which is used to treat chronic myeloid leukaemia and other forms of cancer, costs Rs.1,20,000 a month.

The generic equivalent is currently available in India for about Rs.8500.

For Indian generic firms, especially Cipla, Ranbaxy and Natco, which have been selling similar versions of the drug, it is a welcome move.

Imatinib, "generic" Glivec is on India's National List of Essential Medicines and sells at around one-tenth of the price of the branded drug in the country.

“The decision of the Supreme Court will come as a relief to patients suffering from these dreadful diseases as several Indian companies can continue marketing Imatinib at a fraction of the cost of the Novartis product,” said DG Shah, secretary-general of the Indian Pharmaceutical Alliance, an industry group.

The judgment does not immediately add anything financially to the Indian companies because they are already in the market.

However, more generic companies or companies trying for generic versions of existing patented products are set to be emboldened to foray into the domestic pharmaceutical market.

“The ruling does not add any further sales or does not add any more revenues, profits for them as such,” explained Manoj Kumar, a corporate law expert at law firm Hammurabi & Solomon. “More companies may come and all will continue to sell.”

Indian pharma majors gave the ruling a thumbs-up. “We are pleased with the judgment, which prevents the use of frivolous patents to deny access to medicines for patients,” said YK Hamied, chairman, Cipla.

“The judgment in the Novartis case is a victory for patients both in India and around the world.”